has won an "A-double-plus'' (superior) rating from A.M. Best -- upgraded from A-single-plus.

And the ratings agency tipped AIG's prospects for future penetration in developing markets were "very favourable''.

AIG is an international insurance organisation that ranks as the largest underwriter of commercial and industrial insurance in the US, conducting business in 130 countries through its network of companies.

Its revenues at year-end 1998 were $33 billion, while consolidated assets were $194 billion and capital funds were $27 billion.

The rating agency deemed long-term earnings growth positive due to "franchise value, product innovation, underwriting quality and sophisticated risk-management capabilities including wide use of quality reinsurance''.

The A rating applies to the Group's core North American life insurance operating subsidiaries and leading US retirement savings firm SunAmerica Inc -- an $18 billion acquisition finalised in January.

That deal allowed AIG to gain a firm-footing in the annuities business, and left the group's "prospects for future penetration in the Pacific Rim, eastern Europe and other regions very favourable,'' Best said.

"Opportunities for organic growth in international markets also remain strong, given the companies' franchise strength and the trend toward privatisation of retirement plans in Europe and Latin America.

"Marketing SunAmerica's asset accumulation products through AIG's diverse international distribution system, including its more than 120,000 life insurance agents is expected to expand its international sales.'' The deal also improved AIG's overseas market growth potential and teamed up both company's product development expertise to position the organisation well for expansion into the variable-life market, the agency said.

AIG's overall rating reflected its "excellent operating performance and strong capitalisation as well as the advantages gained by being an integral part of the AIG Inc.'s worldwide operations''.

The ratings agency said the group's strength stemmed from its extensive worldwide distribution network, broad product offerings, consistently strong operating performance and considerable financial flexibility.

"AIG's global life insurance operations have been a significant contributor to its revenues and earnings.''